CrossKeys Revenue Growth Continues in Third Quarter: Company On-track to Meet Goals Set At Beginning of Fiscal Year
KANATA, Ontario--(BUSINESS WIRE)--March 22, 2000--CrossKeys Systems Corporation (Nasdaq: CKEY) (TSE: CKY.) today announced continued growth in revenue and bookings during the third quarter of fiscal year 2000, marking three consecutive quarters of growth.
Revenues for the third quarter ended February 27, 2000 grew to $12.0 million, up 9% from $11.0 million in the second quarter of 2000. This compares with revenues of $13.5 million in the third quarter of fiscal year 1999.
During the quarter, CrossKeys significantly expanded its reach into one of the fastest-growing segments of the Internet marketplace through its acquisition of Dynamic Broadband Networks. This acquisition opens an entirely new market for CrossKeys in broadband access management. Before amortization of goodwill, intangibles, and research and development expenses associated with this acquisition, the Company reported a net loss of $1.6 million in the quarter. This represents a loss of $(0.09) Cdn per share on a fully diluted basis, compared to a loss of $(0.08) Cdn per share in the second quarter of fiscal 2000 and earnings per share of $0.07 Cdn in the third quarter a year ago. In U.S. dollars, fully diluted loss per share for the third quarter was $(0.06), using the average exchange rate for the quarter of $0.6906 as reported by the Federal Reserve Bank of New York.
Including amortization of goodwill, intangibles, and research and development expenses associated with the Dynamic Broadband acquisition, CrossKeys reported a net loss of $6.2 million in the quarter, or $(0.33) Cdn per share on a fully diluted basis. In U.S. dollars, the fully diluted loss per share for the third quarter was $(0.23).
"CrossKeys is firmly on the course we set at the beginning of this fiscal year," says Ian McLaren, President and CEO, CrossKeys. "We kick-started and have maintained revenue growth based on increased product penetration in the marketplace. With Fujitsu as our newest partner, we continue to diversify our access to the market. The acquisition of Dyband in the US significantly broadens our product set and enables us to address an exciting new marketplace that has a much shorter sales cycle. We will launch the new products associated with this acquisition in April. The other partnerships and alliances we signed--Portal, Orchestream and Parc--will further our leadership in assuring better quality of service for the Internet.
"CrossKeys continues to expand its market reach into the fastest growing areas of Broadband communications. With the Internet product development work completed this quarter, the new partnerships, and the acquisition, I am extremely confident going forward."
Highlights in the quarter include:
- Growth in revenue, bookings, and backlog
- Significant new partnerships and alliances in the Internet management market, with Portal, Orchestream and Parc
- Growth in US and UK sales force
- Dyband acquisition, delivering new product capabilities in
broadband access
- Expanded shareholder base through planned reduction in Newbridge holdings.
About CrossKeys
CrossKeys Systems Corporation (www.crosskeys.com) develops software that makes the Internet work for business. Over 200 of the world's largest and most demanding service providers manage the equipment and traffic on their telecom networks with CrossKeys.
CrossKeys Systems Corporation is a public company whose common shares are listed for trading on Nasdaq (CKEY) in the United States and on the Toronto Stock Exchange (CKY.) in Canada.
CrossKeys and logo are registered trademarks of CrossKeys Systems Corporation. All other trademarks are the property of their respective holders and are acknowledged by CrossKeys Systems Corporation.
This announcement may contain forward-looking statements as defined by the US Private Securities Litigation Reform Act of 1995, such as statements related to the industry motivators, market and partnership opportunities. The Company cautions that these statements are based on current expectations that are subject to risks and uncertainties. Actual results may differ due to factors such as customer demand, product shipping schedules, product mix, competitive products and pricing pressures, and changes in the service, network and element management software applications market specifically. Additional information identifying risks and uncertainties is contained in the Company's filings with the Ontario Securities Commission and the Securities and Exchange Commission.
CROSSKEYS SYSTEMS CORPORATION CONSOLIDATED STATEMENTS OF INCOME (Canadian dollars, amounts in thousands, except per share data, US GAAP)
Fiscal quarter Three fiscal quarters
ended ended
February 27, January 31, February 27, January 31,
2000 1999 2000 1999
(unaudited) (unaudited) (unaudited) (unaudited)
Product revenue $ 10,815 $ 11,094 $ 26,874 $ 32,107
Service revenue 1,191 2,436 3,708 6,543
Total revenue 12,006 13,530 30,582 38,650
Product costs 1,732 2,711 4,783 7,795
Service costs 684 915 1,969 2,837
Total cost of sales 2,416 3,626 6,752 10,632
Gross margin 9,590 9,904 23,830 28,018
Expenses
Research and
development 4,960 2,287 11,878 6,557
Selling, general
and administration 7,110 5,235 19,083 14,740
Amortization of
goodwill and
intangibles 1,067 46 1,067 128
In-process research
and development 3,818 - 3,818 -
Provision for
uncollectable amounts - 1,000 - 1,000
Total expenses 16,955 8,568 35,846 22,425
Income (loss) from
operations (7,365) 1,336 (12,016) 5,593
Interest income 479 722 1,653 2,097
Income (loss) before
income taxes (6,886) 2,058 (10,363) 7,690
Income tax recovery
(provision) 692 (652) 1,330 (2,301)
Net income (loss) $ (6,194) $ 1,406 $ (9,033) 5,389
Earnings (loss)
per share
Basic $ (0.33) $ 0.08 $ (0.49) $ 0.29
Diluted $ (0.33) $ 0.07 $ (0.49) $ 0.28
Weighted average
number of common
shares outstanding
Basic 18,563 18,397 18,513 18,348
Diluted 18,563 19,181 18,513 19,161
CROSSKEYS SYSTEMS CORPORATION CONSOLIDATED CONDENSED BALANCE SHEETS (Canadian dollars, amounts in thousands, except per share data, US GAAP)
February 27, May 31,
2000 1999
(unaudited)
ASSETS
Cash and short-term investments $ 29,676 $ 53,426
Accounts receivable 7,238 5,463
Unbilled receivables 6,259 4,438
Fixed assets 6,791 5,693
Intangible assets 11,213 -
Goodwill 7,615 -
Other assets 8,273 8,124
$ 77,065 $ 77,144
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable and accrued liabilities $ 8,963 $ 5,348
Amount due to Dynamic Broadband Networks, Inc. 5,919 -
Deferred revenue 1,029 1,320
15,911 6,668
Shareholders' equity 61,154 70,476
$ 77,065 $ 77,144 |
